Exhibit E-5
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KeySpan's Non-Utility Subsidiaries
KeySpan is a diversified energy holding company which, through its
direct and indirect subsidiaries, engages in energy related businesses. KeySpan
engages in its non-utility activities through seventeen (16) direct non-utility
subsidiaries which are as follows: KeySpan Energy Corporation; KeySpan
Exploration and Production, LLC; KeySpan Corporate Services LLC; KeySpan Utility
Services LLC; KeySpan Electric Services LLC; KeySpan Energy Trading Services
LLC; Marquez Development Corporation; Island Energy Services Company, Inc.;
LILCO Energy Systems Inc.; KeySpan-Ravenswood, Inc.; KeySpan-Ravenswood Services
Corp.; KeySpan Energy Supply, LLC; KeySpan Services, Inc.; Honeoye Storage
Corporation;, KeySpan Technologies Inc. and KeySpan MHK, Inc. In addition,
KeySpan's gas utility subsidiary, The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York, ("KeySpan New York"), owns all or part interests in
three (3) subsidiaries that are engaged in non-utility businesses.1
The following is a description of the activities of KeySpan's direct
and indirect non-utility subsidiaries.
1. KeySpan Energy Corporation ("KEC")
KEC, a New York corporation and wholly owned subsidiary of KeySpan, is
a holding company for a variety of energy related businesses which are conducted
through its five (5) direct, non-utility subsidiaries (KeySpan North East
Ventures, Inc., KeySpan Energy Development Corporation, THEC Holdings Corp.,
KeySpan Natural Fuels, LLC and GEI Development Corp. and indirectly through
KeySpan New York's non-utility subsidiaries.2 Their non-utility businesses are
described below.
KeySpan North East Ventures, Inc. ("KNEV"). KNEV, a Delaware
corporation and wholly-owned subsidiary of KEC, holds a 90% ownership interest
in Northeast Gas Markets, LLC. Northeast Gas Markets, LLC, a Delaware limited
liability company, provides natural gas procurement, contract management and
marketing services to clients located in the northeastern part of the United
States.
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1 KeySpan New York was formerly known as The Brooklyn Union Gas Company. A
certificate of assumed name was filed with the New York Department of State in
May 2000.
2 Brooklyn Union is a utility subsidiary of KEC.
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KeySpan Energy Development Corporation ("KEDC"). KEDC, a Delaware
corporation and wholly-owned subsidiary of KEC, is a development company, and a
holding company for companies engaged in international and domestic non-utility
activities. KEDC's primary activities, both directly and through its seven (7)
direct subsidiaries, are the development, ownership and operation of market area
natural gas pipelines and storage facilities located in the United States, and
investments in companies which develop, own and/or operate non-utility
generation plants, gas processing plants and gathering systems, liquid natural
gas processing facilities, foreign utility companies ("FUCOs") under Section 33
of the Public Utility Holding Company Act of 1935 (the "Act"), natural gas
pipelines, and oil fields located in certain areas of Europe, Canada, or Latin
America. As further described below, KEDC's direct subsidiaries are GTM Energy,
LLC ("GTM"); Honeoye Storage Corporation ("Honeoye"), KeySpan International
Corporation ("KeySpan International"), KeySpan Cross Bay, LLC ("KeySpan Cross
Bay"), KeySpan Midstream, LLC ("KeySpan Midstream"), Solex Production Limited
("Solex") and Adrian Associates L.P. ("Adrian").
o KEDC owns a 50% ownership interest in GTM, a Delaware
limited liability company. GTM is a joint venture engaged in
the development of electric generation project s in the City
of New York, which may obtain exempt wholesale generator
status under Section 32 of the Act ("EWGs"). The projects
are still in the development stage, therefore, GTM does not
yet own electric facilities that are operational.
o KEDC owns 28.8% of the outstanding common stock of Honeoye.3
Honeoye, a New York corporation, owns an underground gas
storage facility in Ontario County, New York consisting of
28 injection/withdrawal wells, 12 observation wells, 19
miles of field gathering lines, compressor units totaling
2700 hp and 10.5 miles of transmission pipeline connecting
the facilities to the Tennessee Gas Pipeline gas
transmission system. Honeoye provides up to 4.8 billion
cubic feet ("BCF") of storage service to New York and New
England area gas distribution companies. Honeye is regulated
by the Federal Energy Regulatory Commission ("FERC") with
respect to its natural gas activities. In the first quarter
of this year, Honeoye filed an application with the FERC
seeking authority to expand field capacity to 6.57 BCF.
o KeySpan International, a Delaware corporation, is a wholly
subsidiary of KEDC which serves as a non-utility holding
company for KEDC's investments in gas distribution,
transportation and electric projects in
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3 KeySpan also directly holds a 23.33% interest in Honeoye.
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selected developing markets in Europe and Latin America. As
described below, KeySpan International has two (2) direct,
wholly-owned subsidiaries, KeySpan CI Limited and KeySpan CI
II Limited, which directly or indirectly hold KeySpan's
interests in the foreign operations.
o KeySpan CI Limited. ("KeySpan CI"), a Cayman
Island corporation, was formed to directly hold a
24.5% ownership interest in Phoenix Natural Gas
Limited ("Phoenix"), a natural gas distribution
system located in Northern Ireland. Phoenix is a
FUCO. KeySpan CI also holds a 50% interest in
Premier Transco Limited ("Premier"), which is a
natural gas transportation pipeline company owning
and operating pipeline facilities spanning the
Irish Sea between southwest Scotland and Northern
Ireland.4
o KeySpan CI II, Limited., a Cayman Island
corporation, was formed to hold through its wholly
owned subsidiary, Grupo KeySpan S. de R.L. de
C.V., a 50% interest in FINSA Energeticos, S. de
R.L. de C.V. ("FINSA"). FINSA is a Mexican company
and a FUCO which owns a small gas distribution
company in Mexico. It is also involved in the
development of generation and gas pipeline
projects in Mexico.
o KeySpan Cross Bay, a Delaware limited liability company and
wholly-owned subsidiary of KEDC, was formed to own KeySpan's
25% interest in the Cross Bay Pipeline Company, LLC ("Cross
Bay"). Cross Bay is involved in the development of the Cross
Bay pipeline, a proposed interstate pipeline that would be
subject to FERC jurisdiction and which will transport gas
from two existing interstate pipelines located in New Jersey
to customers located in New York City and Long Island.
o KeySpan Midstream, a Delaware limited liability company and
wholly-owned subsidiary of KEDC, indirectly holds, through
several wholly-owned subsidiaries, (i) an approximate 50%
interest in each of GMS Facilities Limited ("GMF") and Gulf
Midstream Services Limited ("GMSL"), (ii) a 54% interest in
Gulf Midstream Services Partnership ("GMSP") (collectively,
the "Canadian Companies"), and (iii) a 100% interest in
KeySpan Energy Canada, Ltd. ("KeySpan Canada").5
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4 KeySpan CI, Ltd. directly holds a 24.5% interest in Premier and a 25.5%
indirect interest through its wholly-owned subsidiary named KeySpan (UK)
Limited, a corporation organized under the laws of the United Kingdom.
5 A chain of intermediary companies has been established for the purpose of
holding interests in the Canadian Companies and KeySpan Canada. KeySpan
Midstream and KEDC together own 100% of KeySpan CI
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o GMSP, a Canadian general partnership, owns
interests in 11 natural gas processing plants,
along with the associated raw gas gathering
facilities, located in Alberta and Saskatchewan,
Canada . It is the operator of nine of those
facilities. GMSP also markets natural gas, on
behalf of approximately 40 producers, to about 50
customers in the United States and Canada, and
markets natural gas products (including propane,
butane and sulphur), on behalf of approximately
130 producers to about 50 customers in the United
States and Canada.
o GMF, a Canadian corporation, owns an interest in
one natural gas processing plant in Alberta, which
it operates. It also owns interests in crude oil
and natural gas liquids transportation facilities,
which it operates, and interests in natural gas
liquids fractionation and storage facilities at
Edmonton, Alberta. Together, GMSP and GMF provide
gas gathering and processing services to
approximately 215 producers.
o GMSL, a Canadian corporation, is the managing
partner for GMSP and is the agent for GMF and
GMSP. GMSL is the managing partner for GMSP and is
the agent for GMF and GMSP. Because neither GMSP
nor GMF have employees or office facilities, GMSP
and GMF act through GMSL, which conducts all GMSP
and GMF business, including operating the assets
for which those entities have operating
responsibility, and executing and performing all
GMSP and GMF contracts.
o KeySpan Canada, a Canadian corporation and
wholly-owned subsidiary of KEDC, owns a 19%
interest in the Taylor Gas Liquids Partnership
("Taylor"). Taylor owns a 57% interest in the
Younger NGL Extraction Plant (the "Younger Plant")
in western Canada which is a natural gas liquids
and extraction facility. The Younger Plant
currently has a production capacity of 38,500 bpd.
The Younger Plant obtains the gas it processes
from the West Coast Energy and TCM natural
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Midstream Ltd., a Cayman Island corporation, which in turn is the sole
shareholder of KeySpan Luxembourg S.A.R.L. ("KS Luxembourg"). KS Luxembourg, a
Luxembourg limited liability company, and its wholly-owned subsidiary, Nicodama
Beheer V.B.V. (a Netherlands company), hold all of the issued and outstanding
shares of KeySpan Energy Development Co. (Nova Scotia) ("KeySpan Nova Scotia").
KS Luxembourg also owns 100% of KS Midstream Finance Co. (Nova Scotia) which has
extended credit to KeySpan Nova Scotia. KeySpan Nova Scotia directly owns an
approximate 50% interest in each of the Canadian Companies, 100% of KeySpan
Canada, and a 76% interest in the Paddle River gas processing plant located in
western Canada.
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gas pipelines and ships the natural gas liquids it
produces through the Federated and TCM natural gas
liquids systems. The majority of Taylor's
customers are gas producers and gas marketers
located in Canada.6
o Solex, a Canadian corporation and wholly owned subsidiary of
KEDC, owns the Nipisi oil and gas field located in western
Canada. Solex acquired the field in December 1999 from Gulf
Canada Resources Limited ("GCRL"). Solex is currently
operating the field which consists of approximately 20 wells
and produces approximately 1400 bpd which is sold to Tidal
Resources, a subsidiary of GCRL. Solex has entered into an
asset purchase and sale agreement to sell all or
substantially all of the field and will no longer operate
the field upon closing of the transaction. The sale is
expected to close in October 2000, and Solex will be
dissolved as soon as practicable thereafter.
o KEDC holds a 33.7% interest in Adrian, a New York limited
partnership, which owns a 50% interest in the Adrian gas
storage facility in Steuben, New York. The facility consists
of 9 injection/withdrawal wells, an observation well, 2
miles of field gathering lines, compressor units totaling
2700 hp and 13.5 miles of transmission pipeline connecting
the facilities to the gas transportation pipeline owned by
Tennessee Gas Pipeline. Adrian provides up to 6.2 BCF of
storage service to Public Service Gas and Electric Company,
Elizabeth Gas Company and Commonwealth Gas Company, which
are gas distribution companies located in New Jersey and
Massachusetts.
THEC Holdings Corp. ("THEC"). THEC Holdings Corp., a Delaware
corporation and wholly owned subsidiary of KEC, is the company which holds
KeySpan's interest in The Houston Exploration Company ("Houston Exploration");
KEC currently holds a 70% interest.7 Houston Exploration, is a publicly held
Delaware corporation with its principle executive offices located in Houston,
Texas. It is engaged in the exploration, development and acquisition of domestic
natural gas and oil properties. Houston Exploration also owns associated
gathering systems and exploration and drilling equipment and is engaged in small
scale marketing, supplying, transportation and storage. The company has offshore
properties in the Gulf of Mexico and onshore properties in Texas, Louisiana,
Arkansas and West Virginia. At December 31, 1999, the company had net proved
reserves of 541 BCF, approximately 97% of which are natural gas. It sells gas
and oil to a relatively small number of customers (none of which are affiliates)
and its major
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6 In February 2000, KeySpan Canada exercised its option to participate in the
expansion of the Younger plant, therefore, converting its fluctuating percentage
interest in cash distributions into a fixed percentage of ownership.
7 On March 31, 2000, KEC's ownership interest in Houston Exploration was
increased from 64% to 70%.
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customer for the year ended December 31, 1999, was Adams Resources and Energy,
Inc. A more detailed description of Houston Exploration is contained in its
Annual Report on Form 10-K for the year ended December 31, 1999, a copy of which
is incorporated by reference as Exhibit H-11 hereto. Houston Exploration also
owns 100% of Seneca-Upshur Petroleum, Inc. ("Seneca"), a Delaware corporation,
which is a general partner in a group of limited partnerships which own oil and
gas properties in West Virginia. Houston Exploration manages, operates and
drills the wells for Seneca.
KeySpan Natural Fuels, LLC ("KNF"). KNF, a Delaware limited liability
company and wholly-owned subsidiary of KEC, owns certain interests in onshore
producing wells of Houston Exploration that produce oil and gas from
non-conventional fuel sources, such as oil being produced from shale and tar
sands and natural gas being produced from geopressured brine, Dluonion shale,
coal seams and tight sand formations. Houston Exploration manages and
administers the daily operation of these properties.
GEI Development Corp. ("GEI"). GEI, a Delaware corporation and
wholly-owned subsidiary of KEC, is the successor company to, and holds the
outstanding obligations of, Gas Energy Inc. and Gas Energy Cogeneration Inc.,
which owned interests in several QFs. The QF interests were sold to Calpine
Corporation in December 1997. GEI is currently in the process of winding down
its business affairs and will be dissolved as soon as practicable.
KeySpan New York Subsidiaries. KeySpan New York has three (3) direct,
wholly-owned subsidiaries which are engaged either directly or through
subsidiaries in the following non-utility businesses: partial ownership
interests in a gas transportation pipeline regulated by the FERC; and partial
ownership interests in companies which market Canadian natural gas. The KeySpan
New York's subsidiaries are as follows.
o North East Transmission Co., Inc. ("NET"), (a Delaware
corporation and a wholly-owned KeySpan New York subsidiary)
was created to hold a general partner interest in the
Iroquois Gas Transmission System, L.P. ("Iroquois"). Its
general partner interest is currently 18.49%. Iroquois is a
FERC regulated natural gas pipeline which transports natural
gas from Canada to the Northeast United States. Iroquois has
a wholly owned subsidiary, Iroquois Pipeline Operating
Company, which operates the Iroquois' pipeline.
o KeySpan New York holds a 36.09% interest in Boundary Gas
Inc. ("BGI") and KeySpan Long Island holds a 3.019%
interest. BGI, a Delaware corporation, is a gas marketer. 8
BGI purchases Canadian natural gas on
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8 Eastern Enterprises' two gas utilities, Boston Gas Company and Essex Gas
Company ("Essex"), also own, collectively, a 14.54% interest in BGI.
EnergyNorth's gas utility subsidiary, EnergyNorth Natural Gas, Inc. ("ENGI"),
owns a 3.74% interest in BGI.
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the U.S. side of the U.S./Canadian border and immediately
resells it to 14 customers which are local gas distribution
companies. The BGI utility customers include KeySpan New
York and KeySpan Long Island as well as two of Eastern
Enterprises' gas utilities and ENGI. The buyers ship the gas
they purchase from BGI to their operations located in the
northeastern part of the United States through the
facilities of U.S. pipeline companies.
o KeySpan New York holds a 26% interest in Alberta Northeast
Gas, Ltd. ("Alberta"), a Canadian corporation which is a gas
marketer.9 ANE purchases Canadian natural gas in Canada and
resells it at the U.S./Canadian border to 17 local
distribution gas companies which include KeySpan New York
and KeySpan Long Island as well as three of Eastern
Enterprises' gas utilities and ENGI. The buyers ship the gas
they purchase from Alberta to their operations located in
the northeastern part of the United States through, inter
alia, the Iroquois pipeline.
2. KeySpan Electric Services LLC ("KES")
KES is a New York limited liability company and wholly-owned
subsidiary of KeySpan which, pursuant to a contract, provides day-to-day
operation and maintenance services and construction management services to the
Long Island Power Authority ("LIPA") for LIPA's transmission and distribution
facilities located on Long Island, New York ("T&D Facilities"). In addition, KES
provides management and administration services to LIPA for its interests in the
Nine Mile Point Unit 2 nuclear facility ("NMP2"). KES's services are subject to
the overall direction of LIPA and LIPA maintains control over major decisions.10
In 1998, LIPA acquired the T&D Facilities and NMP2 interests from the Long
Island Lighting Company ("LILCO") in a contemporaneous transaction related to
the combination of LILCO and KEC which resulted in KeySpan's indirect
acquisition of LILCO's non-nuclear generation assets. LIPA entered into the
services arrangement with KES since it was a beneficiary of the experience and
expertise developed by LILCO in operating the T&D Facilities and NMP2. The
services KES provides to LIPA include performance of routine and emergency
facility additions and improvements, customer connections and disconnections,
construction of new facilities, supervision of routine and major capital
improvements, preparation of proposed budgets and monitoring LIPA approved
capital and operating budgets, load and energy forecasts, long range and short
range system and strategic plans, management and repair or modification
activities associated with public works projects and emergency response
activities for events affecting LIPA's facilities.
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9 Essex also owns a .7%% interest in Alberta and ENGI owns a 1.3% interest.
10 KES is not an electric utility company under PUHCA. See BL Holding Corp.,
Holding Co. Act Release No. 26875 at 5 fn. 8 (May 15, 1998).
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3. KeySpan Exploration and Production, LLC ("KEP")
KEP, a Delaware limited liability company and wholly-owned subsidiary
of KeySpan, is part of a joint venture with Houston Exploration to conduct
offshore gas and oil exploration and development in the Gulf of Mexico
consisting of drilling undeveloped offshore leases. The offshore leases are
owned 55% by Houston Exploration and 45% by KEP. Houston Exploration is the
joint venture manager and operator.
4. KeySpan Corporate Services LLC ("KCS")
KCS, a New York limited liability company and wholly-owned subsidiary
of KeySpan, provides a variety of traditional corporate administrative services
to KeySpan and its subsidiaries. The services KCS provides include general
supervision, corporate planning, and providing centralized services including
the following activities: human resources planning and administration;
accounting; financing and treasury services; insurance and risk management;
regulatory and governmental relations; corporate communications and external
relations; consumer outreach and education; information systems and technology;
materials management and procurement; legal services; call center operations;
corporate and strategic planning; internal auditing; billing and payment
processing; budget administration; security services; fleet management and
maintenance; and, building design, maintenance and management building owned or
lease by affiliates. In a separate application, KeySpan will seek Rule 88
approval of KCS as a service company for the registered holding company system.
5. KeySpan Utility Services LLC ("KUS")
KUS, a New York limited liability company and wholly-owned subsidiary
of KeySpan, provides the following services only to KeySpan New York, KeySpan
Long Island, KeySpan Electric Services LLC, KeySpan Energy Trading Services LLC
and KeySpan Generation LLC: gas and electric transmission and distribution
system planning; gas supply planning and procurement; marketing services (i.e.,
planning, administration and support); research and development services; and
meter repair operations. In a separate application, KeySpan will seek Rule 88
approval of KUS as a service company for the registered holding company system.
6. KeySpan Energy Trading Services LLC ("KETS")
KETS, a New York limited liability company and wholly-owned subsidiary
of Keyspan, is a broker of electricity and gas on behalf of LIPA. Specifically,
the services provided by KETS include energy supply portfolio management, risk
management and associated administration and billing, and, as agent for LIPA,
KETS is responsible for (a)
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the purchase from third parties of additional capacity and energy that LIPA
needs to serve its customers, (b) the off-system sale of LIPA's energy which it
does not require to meet the needs of its system customers; and (c) fuel
procurement, delivery, storage and management to meet LIPA's obligations to
provide fuel to its electricity supplier to generate power to provide LIPA for
its retail and wholesale customers.
7. Marquez Development Corporation ("MDC")
KeySpan owns a 75% interest in Marquez Development Corp. ("Marquez"),
a New York corporation, which owns an inactive uranium mill and mine in New
Mexico, however, the uranium was never mined. Marquez's facilities are currently
in the process of being dismantled.11
8. Island Energy Services Company, Inc. ("Island Energy")
KeySpan owns a 70% interest in Island Energy, a New York corporation.
Island Energy is an inactive company which owns no assets.
9. LILCO Energy Systems Inc. ("LES)
LILCO Energy Systems, Inc., a New York corporation, holds a 1% general
partner interest in Iroquois.12
10 . KeySpan-Ravenswood, Inc. ("KeySpan-Ravenswood")
KeySpan-Ravenswood, Inc. ("KeySpan-Ravenswood"), a New York
corporation and wholly-owned subsidiary of KeySpan, is an exempt wholesale
generator ("EWG") pursuant to Section 32 of the Act. Keyspan-Ravenswood owns
and/or leases and operates an approximately 2,168 megawatt electric generating
facility located in Queens, New York ("Ravenswood Facility"). KeySpan-Ravenswood
acquired the Ravenswood Facility from The Consolidated Edison Company of New
York, Inc. ("Con Edison") in June of 1999 as
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11 The interest in Marquez was originally purchased by LILCO in the 1970's as a
potential fuel supply source for its nuclear generation facilities. KeySpan
acquired the Marquez interest as part of its acquisition in 1998 of certain of
LILCO's generation and gas assets.
12 Collectively, KeySpan indirectly holds a 19.4% interest in Iroquois
through LES's 1% interest and, as described above, NET's 18.4% general
partnership interest.
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part of Con Edison's divestiture of its generation assets. KeySpan-Ravenswood
sells energy, capacity and ancillary services at wholesale.
11. KeySpan-Ravenwood Services Corp. ("KRS")
KRS, a New York corporation and wholly-owned subsidiary of KeySpan,
was created in June of 1999 in connection with KeySpan-Ravenswood's acquisition
of the Ravenswood Facility. KRS is primarily engaged in providing day-to-day
operation and maintenance services to KeySpan-Ravenswood for the Ravenswood
Facility, subject to KeySpan-Ravenswood's overall direction and control. KRS
also provides, at no charge, small amounts of electricity to Con Edison and
provides day to day operation and maintenance services to Con Edison for its
steam plant located at the site of the Ravenswood Facility; the provision of
these services was a condition of Con Edison's sale of the Ravenswood Facility
to KeySpan-Ravenswood. Con Edison sells the steam produced at the plant to its
steam distribution customers located in New York. KRS employees include Con
Edison employees which were transferred to KRS at the time KeySpan-Ravenswood
acquired the Ravenswood Facilities. KRS does not own any electric or steam
facilities.
12. KeySpan Energy Supply, LLC ("KE")
KE, a Delaware limited liability company and wholly-owned subsidiary
of KeySpan, is engaged in energy brokering activities (i.e., it acts as an
intermediary and does not take title to energy). Specifically, it manages the
purchases of gas and electricity as agent for customers of KeySpan Energy
Services, Inc. and KeySpan Energy Management, Inc. KE, as KRS' agent, also
manages KRS' purchases of its fuel supply for the Ravenswood Facility and
manages the bidding of KeySpan-Ravenswood's power sales into wholesale
electricity markets.
13. KeySpan Services Inc. ("KSI")
KSI, a Delaware corporation and wholly-owned subsidiary of KeySpan, is
a holding company of fifteen (15) wholly-owned, direct non-utility subsidiaries
which are engaged in: the ownership of telecommunication equipment; the design
and development of energy plants for large industrial and institutional
customers; the installation and maintenance of heating and central
air-conditioning systems; providing a wide range of appliances services for
residential customers and small business customers; providing plumbing and
engineering services; and marketing gas and retail electricity.
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o KeySpan Communications Corp. ("KCC"), a New York corporation
and wholly-owned subsidiary of KSI, owns an approximately
400-mile fiber optic network on Long Island and in New York
City. KCC constructs and operates fiber optic networks and
transportation facilities. Currently, KCC's fiber optic
network serves several unaffiliated local, long distance and
transatlantic telephone carriers (such as AT&T and MCI)
under long and short term leases. KCC also has a contract
with its affiliate, KCS, pursuant to which portions of the
fiber optic network is used by KCS to serve the
telecommunications needs (e.g., internal voice and date
transmission requirements) of KeySpan and certain of its
utility and non-utility subsidiaries.
o KeySpan Energy Management, Inc. ("KEMI"), a New York
corporation and wholly-owned subsidiary of KSI, is the
holding company of two wholly-owned non-utility subsidiaries
which are engaged in the design and operation of energy
systems for large-scale residential and commercial
facilities, and providing energy-related services to clients
in the New York metropolitan area. The customers consist of
industrial or large commercial and institutional entities,
including hospitals, universities, hotels and municipal
authorities, such as the New York City Housing Authority.
Energy related services include: the review of existing
utility needs (i.e., electric, power supply and heating,
ventilation, and air conditioning ("HVAC") systems); the
design and recommendation of new efficient systems; and the
installation and construction of power supply and HVAC
systems, boilers and burners. KEMI's subsidiaries are (i)
KeySpan Engineering Associates, Inc., a New York
professional engineering corporation, which reviews, and
provides recommendations with respect to, the power supply
needs of its large commercial, industrial and institutional
customers and designs efficient, new power supply systems,
such as cogeneration facilities; and (ii) R.D. Mortman, LLC
which installs and services burners and boilers and designs,
builds, installs and services HVAC systems. None of these
companies provide services or goods to their affiliates.
o KeySpan Energy Services, Inc., a Delaware corporation and
wholly-owned subsidiary of KSI, is a gas and retail
electricity marketer.13 It buys and sells gas to
residential, commercial and industrial customers located in
the Northeastern United States. It does not provide any
services or goods to its affiliates.
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13 It sells electricity to a limited number of retail customers.
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o KeySpan Energy Solutions, LLC ("KeySpan Solutions"), a New
York limited liability company and wholly-owned subsidiary
of KSI, provides service and maintenance for heating
equipment, water heaters, central air conditioners and gas
appliances and offers safety products and services to
residential and small commercial gas customers. The safety
products and services include: safety inspections and repair
services; energy assessment and energy related safety
checks, such as carbon monoxide and faulty equipment wiring;
products to promote safe energy use, increase energy
efficiency or provide energy related information, such as
carbon monoxide, smoke and fire detectors and fire
extinguishers. KeySpan Solutions also wholly owns the
following subsidiary:
o KeySpan Plumbing Solutions, Inc., a New York
corporation, provides plumbing maintenance and
services to residential and small commercial
customers located in the New York Metropolitan
area. It does not provide any services or goods to
its affiliates.
o Fritze KeySpan, LLC, a Delaware limited liability company,
designs, builds, installs and services HVAC systems for
small commercial and residential customers in North and
Central New Jersey. It does not provide any services or
goods to its affiliates.
o Delta KeySpan, Inc., a Delaware corporation, designs, builds
and installs HVAC systems primarily for commercial customers
in Rhode Island and the New England region. It does not
provide any services or goods to its affiliates.
o Active Conditioning Corp., a New Jersey corporation, is
engaged in installing and maintaining boilers and HVAC
systems for residential and commercial customers located
in_New Jersey. It does not provide any services or goods to
its affiliates.
o Fourth Avenue Enterprise Piping Corp., a New York
corporation is engaged in installing and maintaining boilers
and HVAC systems for commercial and institutional customers
located in New York. It does not provide any services or
goods to its affiliates.
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o Paulus, Sokolowski & Sartor, Inc. ("PSS"), a New Jersey
corporation, is engaged in engineering and consulting
services to companies located primarily in New York, New
Jersey and Florida. PSS's design services include
mechanical, electrical, civil, structural, sanitary,
geotechnical and architectural. It also engages in
permitting, licensing and environmental compliance. PSS's
clients consist of large and industrial customers, such as
utilities, corporate offices, hotels, laboratories,
warehouses, pharmaceutical companies, hospitals,
universities and power plants. It does not provide any
services or goods to its affiliates.
o WDF, Inc., a New York corporation, provides mechanical
contracting services to large scale commercial,
institutional and industrial customers in the New York area.
Its services are primarily the design, construction,
alteration, maintenance and repair of plumbing and HVAC
systems including related piping installation and welding.
It does not provide any services or goods to its affiliates.
o Roy Kay, Inc. ("RKI"), a New Jersey corporation, is engaged
in mechanical and general contracting services to
commercial, industrial and institutional customers such as
the New York City Housing Authority and New York State
Dormitory Authority. RKI installs and renovates HVAC
systems, as well as oil and gas burners. Its services
include the installation of all piping equipment, as well as
the design and fabrication of piping and sheet metal for its
mechanical contracting services. It does not provide any
services or goods to its affiliates.
o Roy Kay Electrical Company ("RK Electrical") is a New Jersey
corporation that is licensed to perform electrical
contracting work both in New York and New Jersey. RK
Electrical's services include installing and upgrading the
wiring and power supply of buildings for commercial,
institutional and industrial customers such as the New York
City Housing Authority and New York State Dormitory
Authority. It does not provide any services or goods to its
affiliates.
o Roy Kay Mechanical, Inc. ("RK Mechanical") is engaged in the
installation and renovation of sprinkler systems and fire
suppression systems in New York and New Jersey. Its services
include piping fabrication for its systems for commercial,
institutional and industrial customers such as the New York
City Housing Authority and New York
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State Dormitory Authority. It does not provide any services
or goods to its affiliates.
o Binsky & Snyder, Inc., a New Jersey corporation, is engaged
in installing HVAC systems for commercial and industrial
customers located primarily in New Jersey.
o Binsky & Snyder Service, Inc., a New Jersey corporation, is
engaged in the servicing and maintenance of HVAC systems for
commercial and industrial customers located primarily in New
Jersey.
14. KeySpan Technologies Inc. ("KT")
KT is a New York corporation, and wholly-owned subsidiary of KeySpan,
involved in developing, demonstrating, marketing, operating and maintaining, for
residential and institutional customers, fuel cells that utilize natural gas.
Its industrial customers include hospitals and chemical companies located in New
York.
15. KeySpan MHK, Inc. ("KMHK")
KMHK, a Delaware corporation, currently owns an approximately 18.2%
equity interest in MyHomeKey.com, Inc. ("MHK").14 MHK, a Delaware corporation,
has been created to establish and maintain an Internet-based website which will
serve as (1) a national platform for local websites offering energy and
home-related goods and services and (2) a contractor for energy and home-related
services from goods and services providers of national scope. Specifically, MHK
will act as a national website which incorporates software and software
integration systems which can be accessed by local websites operated by MHK
licensees. It is intended that MHK licensees will be energy companies throughout
the United States, each of which will be allocated an exclusive geographic
territory. Each licensee will establish and maintain its own website which will
be accessed through the MHK master site. With the combined functionality of the
national and local websites, the users of the MHK licensees' websites will be
able to access a wide variety of services, including (i) identifying and
scheduling local and national providers of routine and emergency energy and
home-related services (plumbing; HVAC installation, maintenance and repair;
roofing; carpet cleaning; security system installation and monitoring; etc.);
(ii) purchasing and scheduling installation of home appliances; (iii) monitoring
and remotely controlling energy usage and the home environment; (iv) purchasing
energy through links with other websites; (v) paying utility and other bills;
(vi)
_______________________
14 KMHK acquired its interest in MHK in late March of 2000. KMHK's approximate
18.2% equity interest is calculated as oof April 18, 2000, on a fully diluted
basis, assuming the conversion of all issued and outstanding convertible
preferred stock of MHK and the exercise of all outstanding stock options.
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monitoring community calendars (e.g., civic events, governmental meetings,
Little League games); (vii) making reservations and purchasing tickets for local
activities (e.g., restaurants, movies, sporting events); and (viii) managing
residential relocations. MHK will operate and maintain the national website, and
will have responsibility for making arrangements with national service
providers. The MHK licensees will operate and manage their local websites, and
will have responsibility for making arrangements with local services providers
and local communities. Responsibility for promoting the website nationally will
rest with MHK. Responsibility for promoting the co-branded website within a
licensee's geographic territory will be divided between MHK and the licensee.
KMHK has entered into a license agreement with MHK pursuant to which
KMHK will develop, operate and maintain a local website featuring KeySpan
companies. The local websites will be co-branded" so that, in the case of
KeySpan, the local website will be known as "KeySpan MyHomeKey." KMHK's license
agreement with MHK designates six states as KMHK's geographic territory (i.e.,
New York, New Jersey, Connecticut, Massachusetts, New Hampshire and Rhode
Island). Any person residing within those six states can become a registered
user of the KeySpan MyHomeKey local website at no charge. The ability to become
a registered user of the website will not require the user to be an energy or
utility customer of KMHK's affiliates. However, KeySpan believes that the
KeySpan MyHomeKey website will enable its registered holding company system to
be more competitive in the energy industry as a provider of "before and after
the meter services" by attracting new customers, and appealing to existing
customers, through the convenience of Internet access to the myriad of services
offered by the KeySpan family of utility and energy related companies.
The MHK website and the KeySpan MyHomeKey website are not yet fully
developed. It is anticipated that the "first release" of the national host and
local websites will occur in late Summer or early Fall 2000, and that further
development of the websites' capabilities will be ongoing.
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